Costs of Investing: A Breakdown

It's not always easy to get a handle on your investing costs. Depending on where you invest, it might be difficult to get a good understanding of what the costs are and what investors might expect to pay for them. We believe it shouldn’t be that way. You should always know what you’re paying—and finding that information should be easy.

Multiple leg online option orders such as spreads, straddles, combinations, and rollouts are charged only one $4.95 base commission, plus per-contract fees for the total number of option contracts. For Broker-Assisted Options Commissions, add $25 to the Online Options Commission. Complex option orders involving both an equity and an option leg, including Buy/Writes or Write/Unwinds, are charged per-contract fees for the option leg, plus commissions for the equity leg subject to the client's current commission schedule. There is no base commission for the option leg.

The Securities and Exchange Commission (SEC) assesses transaction fees on national securities exchanges and self-regulatory organizations based on the aggregate dollar amount of sales of certain securities. The SEC recalculates the amount of this fee periodically—at least once per year but sometimes more often. National securities exchanges and self-regulatory organizations offset the transaction fees by charging their member broker-dealers such as Schwab, and we, in turn, offset this fee by charging you an Exchange Process Fee for covered sell transactions. U.S. option exchanges charge Schwab and other broker-dealers per-contract fees for purchases and sales of exchange-listed options. The exchanges may charge these fees even on transactions executed on other exchanges, which can result in multiple fees being imposed on Schwab for a single transaction. Schwab offsets these fees by charging you a single Exchange Process Fee for each covered transaction. Any Exchange Process Fee that appears on your trade confirmation for a sale of an exchange-listed option will combine the offsets for the fees charged both by the U.S. option exchanges and by the national securities and self-regulatory organizations.

The Exchange Process Fee will rise or fall periodically depending upon the rates set by the SEC or by the U.S. option exchanges, as applicable. Several U.S. option exchanges currently assess a fee upon Schwab for covered transactions. Of them, the Chicago Board Options Exchange (CBOE) and the International Securities Exchange (ISE) fees, as shown in the table below, will be included in the Exchange Process Fee.

Mutual Funds

Operating Expense Ratio (OER)

OERs are charged annually by the fund company, expressed as a percentage of a fund's average net assets. They cover the fund's management and other costs.

Passively managed funds are designed to track a specific market index and typically have lower costs (OERs) than actively managed funds that pay fund managers or management teams to make ongoing decisions on where a fund's money is invested.

Passively managed funds

The industry asset-weighted average OER for passively managed mutual funds is 0.08%.4

Passively managed funds

Schwab Funds®*,5

The asset-weighted average OER for passively managed mutual funds is 0.03%.6 OERs can range from 0.03%-0.39%.

Actively managed funds

The industry asset-weighted average OER for actively managed mutual funds is 0.71%.4

Actively managed funds

Schwab Funds*,5

The asset-weighted average OER for actively managed mutual funds is 0.69%.6 OERs can range from 0.3%-1.33%.

Load

When you purchase or redeem shares in certain load-based mutual funds, some fund companies charge you this one-time commission to compensate the broker for the sale.

No-load and load-waived funds that do not participate in Schwab Mutual Fund OneSource are also available, but transaction fees apply.

Transaction Fee

When you purchase or redeem a mutual fund, your brokerage company may charge you a trade fee. This fee may also be used to compensate the brokerage in instances where it does not receive compensation from the fund.

†Per-trade transaction fees do not exceed 8.5% of principal, up to $49.95. Trades below $100 in principal are exempt from the transaction fee.

*Schwab Funds are managed by Charles Schwab Investment Management and are included in the Schwab Mutual Fund OneSource service, which offers thousands of no-load, no-transaction-fee mutual funds.

View important information about mutual funds

4. Industry OERs obtained from Simfund, as reflected on 6/30/18. Includes OERs from all funds registered in the U.S., excluding money market funds and fund of funds. OERs are net expense ratios, and may not take into account the impact of fee cuts or fee increases that occurred since the prospectus was last filed.

6. Asset-weighted average expense ratio is based on assets as of 6/30/18. An asset-weighted average basis is used to give more weight to funds with greater assets. It reflects where investors are actually putting their assets, and thus, better reflects the actual expenses by investors than does a simple average (weighting each fund equally).

7. Trades in no-load mutual funds available through the Mutual Fund OneSource service (including Schwab Funds), as well as certain other funds, are available without transaction fees. For each of these trade orders placed through a broker, a $25 service charge applies. Schwab reserves the right to change the funds we make available without transaction fees and to reinstate fees on any funds. Schwab's short-term redemption fee of $49.95 will be charged on redemption of funds purchased through Schwab's Mutual Fund OneSource service (and certain other funds with no transaction fees) and held for 90 days or less. Schwab reserves the right to exempt certain funds from this fee, including Schwab Funds®, which may charge a separate redemption fee, and funds that accommodate short-term trading.

Charles Schwab & Co., Inc., Member SIPC, receives remuneration from fund companies participating in the Mutual Fund OneSource service for recordkeeping and shareholder services and other administrative services. Schwab also may receive remuneration from transaction fee fund companies for certain administrative services.

8. Based on competitor pricing information obtained from their respective websites as of 8/17/18: Fidelity, E*Trade, TD Ameritrade, and Vanguard. Competitor pricing and offers subject to change without notice.

9. Please be aware that transaction fees may apply to certain no-load funds that do not participate in Schwab’s Mutual Fund OneSource platform. Such funds are subject to Schwab's standard transaction fees, in addition to any redemption fees imposed by the fund. See the Charles Schwab Pricing Guide for details. Get more details about Schwab Mutual Funds.

Exchange-Traded Funds (ETFs)

Operating Expense Ratio (OER)

OERs are charged annually by the fund company, expressed as a percentage of a fund's average net assets. They cover the fund's management and other costs.

Passively managed funds are designed to track a specific market index and typically have lower costs (OERs) than actively managed funds that pay fund managers or management teams to make ongoing decisions on where a fund's money is invested.

Passively managed ETFs

The industry asset-weighted average OER for passively managed ETFs is 0.20%.10.

Passively managed ETFs

Schwab ETFs™*11

The asset-weighted average OER for passively managed ETFs is 0.05%.12 Expenses can range from 0.03%-0.13%.

Third-party passively managed ETFs traded on US exchanges are also available. OERs vary from fund to fund.

Trade Commission (online)

Your broker may charge you a trade commission each time you buy or sell an ETF.

$0-$2013 for online trades, depending on number of trades.

$0 online for Schwab ETFs and any ETF participating in the Schwab ETF OneSource™ platform.14

$4.95 for all other ETFs.15

Other Costs

Bid/ask spreads and changes in discounts and premiums can also factor into your trade costs. Learn more.

Costs vary from fund to fund.

Costs vary from fund to fund.

*About Schwab ETFsSchwab ETFs are distributed by SEI Investments Distribution Co. and are included in the Schwab ETF OneSource platform, which is a selection of more than 250 ETFs available commission free online in your Schwab account. Schwab ETF OneSource covers 65 Morningstar categories spanning U.S. Equity, Fixed Income, and Commodity ETFs.

View important information about ETFs

10. Industry OERs obtained from Simfund, as of 6/30/18. Includes OERs from all funds registered in the U.S., excluding money market funds and fund of funds. OERs are net expense ratios, and may not take into account the impact of fee cuts or fee increases that occurred since the prospectus was last filed.

12. Asset-weighted average expense ratio from Morningstar as of 6/30/18. An asset-weighted average basis is used to give more weight to funds with greater assets. It reflects where investors are actually putting their assets, and thus, better reflects the actual expenses by investors than does a simple average (weighting each fund equally).

13. Based on competitor pricing information obtained from their respective websites as of 8/17/18: Fidelity, E*Trade, TD Ameritrade, and Vanguard. Competitor pricing and offers subject to change without notice.

14. Conditions Apply: Trades in ETFs available through Schwab ETF OneSource (including Schwab ETFs) are available without commissions when placed online in a Schwab account. Service charges apply for trade orders placed through a broker ($25) or by automated phone ($5). An exchange processing fee applies to sell transactions. Certain types of Schwab ETF OneSource transactions are not eligible for the commission waiver, such as short sells and buys to cover (not including Schwab ETFs). Schwab reserves the right to change the ETFs we make available without commissions. All ETFs are subject to management fees and expenses. Please see Charles Schwab Pricing Guide for additional information.

Charles Schwab & Co., Inc. receives remuneration from third-party ETF companies participating in Schwab ETF OneSource for record keeping, shareholder services and other administrative services, including program development and maintenance.

15. Restrictions apply: The standard online $4.95 commission does not apply to foreign stock transactions, large block transactions requiring special handling, or restricted stock transactions (except for vested equity awards issued from an employer or corporate stock plan trades). See the Charles Schwab Pricing Guide for Individual Investors for full fee and commission schedules.

Schwab reserves the right to act as principal on any fixed income transaction, public offering or securities transaction. When Schwab acts as principal, the bond price includes our transaction fee and may also include a markup that reflects the bid-ask spread and is not subject to a minimum or maximum. When trading as principal, Schwab may also be holding the security in its own account prior to selling it to you and, therefore, may make (or lose) money depending on whether the price of the security has risen or fallen while Schwab has held it. When Schwab acts as agent, a commission will be charged on the transaction.

Get the best bond prices available to Schwab from more than 200 dealers.

Portfolio Management Fees

Portfolio Management Fees

What are the costs?

What you might pay elsewhere

With Schwab

Annual Portfolio Management Fees

If you choose to have your portfolio of investments professionally managed or to obtain advice for a fee, there may be additional periodic costs. Usually based on a percentage of your assets, the costs can vary depending on the level of assets held in your portfolio and the level of service you receive.

Keep in mind that you may also be paying investment costs specific to the underlying assets in your portfolio, such as ETF or Mutual Fund OERs and trade commissions.

Dedicated financial advice17

1.01% average advisory fee charged by full service brokers (negotiated basis).18

Dedicated financial advice17

17. Example model for Dedicated Financial Advice is limited to services defined as non-discretionary advice for a wrap fee. Additional discretionary advice or advised offers may be available and typically come with higher management fees versus non-discretionary advice.

18. Cerulli report, U.S. Managed Accounts 2017, reflects 2016 data. Negotiated basis reflects a broker average fee calculation that includes rates charged that are lower than the broker's published rate, e.g. in instances where a customer negotiates a lower rate with the broker.

19. There are certain eligibility requirements for working with a dedicated Financial Consultant. Schwab Private Client ("SPC") is a non-discretionary investment advisory service sponsored by Charles Schwab & Co., Inc. ("Schwab"). Schwab Private Client Investment Advisory, Inc. ("SPCIA") is a registered investment advisor and provides portfolio management for the SPC service. Schwab and SPCIA are affiliates and are subsidiaries of The Charles Schwab Corporation.

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Unless otherwise noted, competitor information obtained from their respective websites as of 8/17/18.

See the Charles Schwab Pricing Guide for Individual Investors ("the Guide") and any amendments to the Guide for comprehensive details on fees.

Investors should consider carefully information contained in the prospectus or, if available, the summary prospectus, including investment objectives, risks, charges, and expenses. Please read the prospectus carefully before investing.

Investment returns will fluctuate and are subject to market volatility, so that an investor’s shares, when redeemed or sold, may be worth more or less than their original cost. Unlike mutual funds, shares of ETFs are not individually redeemable directly with the ETF. Shares are bought and sold at market price, which may be higher or lower than the net asset value (NAV).

Options carry a high level of risk and are not suitable for all investors. Certain requirements must be met to trade options through Schwab. Please read the options disclosure document titled Characteristics and Risks of Standardized Options before considering any option transaction. Supporting documentation for any claims or statistical information is available upon request.